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Pennsylvania Electric Restructuring

Fortnightly Magazine - October 1 1997

The Pennsylvania Public Utility Commission has ended the summer with a series of rulings to guide the state's electric utilities as they devise individual restructuring plans. Overall, the rules seek to temper the effect of competition on certain consumer safeguards and social benefit programs.

Public Purpose Programs. Under new PUC guidelines, electric distribution companies must submit comprehensive, multi-year plans for universal service and energy conservation. The guidelines enforce the state's recent electric restructuring law, which maintains prior state policies on low-income assistance (150 percent of federal poverty guidelines), universal service and energy conservation, allowing for full recovery of costs through a "non-bypassable rate mechanism."

According to the PUC, utility programs must be "competitively neutral" and include features such as percentage-of-income payment plans and rate discounts. Re Universal Service and Energy Conservation Programs, Docket No. M-00960890F0010, July 11, 1997 (Pa.P.U.C.).

Safety and Reliability. New PUC rules also include detailed performance standards for reliability of electric distribution systems under the new direct-access regime, including guidelines for system interruption.

Each distributor must maintain a program to identify "worst-performing" circuits and take any actions necessary to meet historical levels of reliability. The PUC declined to require specific inspection and maintenance standards, however, finding that the utilities continually develop new methods and technologies to improve the inspection and testing process.

The proposed rule assumes that the North American Electric Reliability Council and the appropriate regional council or successor organizations will play a primary role in transmission system reliability and maintenance of adequate reserve margins. Re Electric Service Reliability, Docket No. L-009700120, June 13, 1997 (Pa.P.U.C.).

Customer Service. The new PUC rules will require electric distribution utilities to continue to offer consolidated billing and complaint resolution. The commission explained, however, that the restructuring law contained no provisions excluding competitive suppliers from providing the two aforementioned services.

The rules also indicate that distribution utilities will remain responsible for all metering functions.

The PUC guidelines state that keeping "all physical activity" related to metering under the control of the distribution utilities would offer the best guarantee of maintaining existing service standards as required under the state's restructuring act.Re Maintaining Customer Services, Docket No. M-009608909 F0011, July 11, 1997 Pa.P.U.C.).

Securitization. The PUC also has completed new rules (record keeping, perfection of security interests. etc.) for securitization of approved transition costs. Re Perfection of Security Interests in Intangible Transition Property, L-0097-0122, July 11, 1997 (Pa.P.U.C.). t

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